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ELI5
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You are currently reading a thread in /biz/ - Business & Finance

Thread replies: 4
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ELI5

Assuming we all think oil prices are eventually going to rise, why don't investors buy it up at current prices and hold it for a couple of years?

Even if it only goes up to $40-$50 two years from now, it still gives a far better return than shares or bonds.
>>
>>1040931
That means oil is going down my retarded friend
>>
>>1040931
They do what you are saying already.
It even creates a market phenomenon known as contango where future prices are more expensive. This makes it hard to buy oil for the future to invest. Hence why most people just buy a big oil company and go long (hold the stock until oil is high and it reflects in the stock earnings/price).
>>
>Assuming we all think oil prices are eventually going to rise

If you assume this, you assume that developed Western economies will begin consuming again or that a couple of the major oil and gas producing regions will stop doing so. I doubt the first will happen and the second is unthinkable.
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